Lykourgos
Lykourgos
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It's poor form to post half-finished work, but I'm going on holiday tomorrow and won't be able to work on this for a while. All comments appreciated; I'm going to finish this up in January when I return, and then hopefully it can be put on the front page or somehow used to produce a new essay that is suitable for that sort of thing.
Brief Introduction to the Qing Zhong method
Qing Zhong is the title given to a series of chapters in the Guan Zi that deal with economic planning and theory. The words “Qing” and “Zhong” literally mean light and heavy, cheap and valuable, unimportant and important, etc.
The Guan Zi is a collection of ancient essays and diagrams that were ultimately collected under one title during the Han Dynasty. Although the content of the text was traditionally attributed to Guan Zhong, hence the name “Guan Zi”, the essays were generally written centuries after Guan Zhong’s death, and come from a wide variety of sources. Nobody knows who wrote the various chapters in the Qing Zhong section, and the different theories on the date of composition range from Warring States, to the reign of the revolutionary classicist, Wang Mang.
If you wish to read the Guan Zi in English, the best edition is Allyn Rickett’s, in two volumes. The complete text consists of 86 chapters (a handful of which have been lost), and in Rickett’s work each chapter comes complete with a lengthy introduction essay and numerous foot notes. All told, you’re looking at about 1,000 pages of English text, of which the Qing Zhong chapters encompass the final 200 pages. For the Chinese text, I have the Hei Long Jiang People’s Press edition in simplified characters. For the most part, the quotes given in this article are from Rickett’s English translation, and the HLJ Chinese text. (NOTE: The quotes were quickly done, and for some of them I just quickly cut and pasted the Chinese from online without making necessary emendations; my focus was almost entirely on producing a chapter summaries)
This site also has the ancient text in traditional characters with support features: http://ctext.org/guanzi . I also think the Library of Chinese Classics edition of the Guan Zi might be out now. The Library produces books that contain English, Ancient Chinese, and Modern Chinese side by side. However, these books are full of typographical errors, so buyer beware.
Now that the short and inadequate introduction is out of the way, let’s review the Qing Zhong chapter-by-chapter!
臣乘马
Planned Fiscal Management
Style: A short dialogue between Duke Huan and his chief minister, Guan Zhong. Duke Huan wants to know how to manage his kingdom; Guan Zhong criticises the duke and then offers an economic idea. The focus is on how the state can obtain the resources it needs to function without imposing new taxes on the people.
Political/Economic content:
Agricultural work must be done during specific parts of the year. Corvee labour takes the people away from their fields. Misuse of corvee labour disrupts agricultural work, and the result is a reduced harvest.
A reduced harvest, combined with taxation, may be too much for the people to bear. Banditry may arise, and civil war could break out. With proper planning, however, the state can obtain whatever it needs without disturbing agricultural work or imposing new taxes. Proper planning consists of the following:
(A) When it is time to sow the crops, spare the people from corvee labour and hand out loans for them to buy seed.
(B) When the new crop is harvested, have the people repay the loans in grain. Store the grain in the state granaries.
(C) When grain becomes expensive, purchase whatever the state desires. Announce that because the state is cash-poor, it will use grain to an equal value to pay the bill.
Grain is plentiful, and therefore cheap, when the new harvest is brought in. By having the loans repaid in grain at this time, the state can fill up the granaries. As time progresses, the amount of grain in the kingdom will shrink, making grain more valuable. The state may then disgorge the granaries, and obtain whatever it needs without imposing new taxes.
Quote:
This chapter lacks good quotes, but here is Guan Zhong’s opening response to Duke Huan:
“If the country lacks reserves, the fault lies with its administrative orders.”
“国无储在令”
乘马数
Art of Fiscal Management
Style: This chapter is a continuance of the former dialogue, and consists of Duke Huan asking Guan Zhong a series of questions. Here, however, the focus is on how the state may stabilise commodity prices and create fairer taxation.
Economic/Political Content:
The state should pay attention to the seasons when issuing orders to the people, so that the harvest is not ruined. The state should regulate commodity prices, so that it can control the flow of goods in international trade, and can put an end to private commodity trading abuses. The state should further control commodity prices so as to regulate private wealth, and compensate for shortfalls in the state budget.
The state should enact the following plans:
(A) The ruler should set aside an amount of grain each year and create a long-term reserve. When a drought or other disaster disrupts agricultural work, the ruler can then employ the masses on state projects and pay them with the stored grain.
This plan is done to maintain economic stability in trying times, rather than please the king with new palaces and toys.
(B) Standardise the price of commodities within the kingdom. Do so by manipulating the price of grain, presumably using the method from the previous chapter.
The economic reasoning is as follows:
If internal prices are cheaper than external prices, then goods will flow abroad. If internal prices are more expensive, then foreign goods will flow into the country. Private experts who have mastered price fluctuations are able to profit, and if the state fails to regulate prices, then someone else will. The fluctuations will impact the people because although they always work the same number of hours, their resulting income will not always have the same purchasing power.
Finally, grain is the key that controls the price of all other commodities. When grain is expensive, everything is cheap. When grain is cheap, everything is expensive.
The purpose of this plan is to put an end to private prospecting, and to ensure that the common people maintain enough purchasing power to support their family.
(C) The state should create a staggered land-tax that takes into consideration the quality of the land. Poor land should be taxed lightly, and the best land can make up the difference. When this is done, people won’t abandon poorer land.
Quote:
Guan Zi illustrating the importance of economic planning:
“…people, lacking even gruel to eat, will be forced to sell their children. Fierce and resolute men will become exceedingly violent, awhile people who are poor and sick become beggars. Should the prince implement laws to restrain them, the people may be punished and executed, but they will not submit to his government on high. Such are the results of failure in the art of planned fiscal management.”
“民无𥼷卖子者数矣。猛毅之人淫暴，贫病之民乞请。君行律度焉，则民被刑僇而不从于主上。此家策乘马之数亡也。”
问乘马
Questions on Fiscal Management
(Lost)
事语
Discourse on Economic Matters
Style: A dialogue between Duke Huan and Guan Zhong. Duke Huan asks Guan Zhong to comment on some economic plans that the duke learnt from two men. The men are named Great Extravagance and Idle Fields, and Guan Zhong criticizes their ideas and offers a third way.
Economic/Political Content:
Great Extravagance: the upper class should purchase lots of fancy products and sacrifice tonnes of animals. This will ensure that production flourishes and plenty of livestock is raised.
Response: This economic plan is only suitable in a large nation not facing danger. The upper class itself is able to consume enough products, and so the state needn’t personally fund the production. If a smaller state tries to do this, the government’s financial reserves may be insufficient to support the production, and if the smaller state competes with larger states then the people will be over-worked.
Idle Fields: don’t bother doing anything; have conquered people do it for us, and have allies save us when need be.
Response: This economic plan is unsuitable, because the imperial holdings will be lost if the internal economy is not stable. Furthermore, states that lack grain reserves will be besieged, and ill-maintained fortifications will fall.
Guan Zi’s plan: Store away a fraction of the grain harvest each year, and create a reserve. The state could even store away half the grain each year, and have people supplement food production by gathering vegetables.
When the state has 10 years worth of grain reserves (a popular goal in literature at the time), everything will be awesome. (to be fair, I think the author assumes that the large grain reserve will be used in accordance with former chapters, thereby stabilizing the economy and maintaining fair wealth distribution).
Quote:
Guan Ζhong drops a rhyme describing how things go under real rulers:
“Their land having been opened for cultivation,
Their people settle down.
Their granaries being full,
Their people know propriety and moderation.”
“壤辟举，
则民留处。
仓廪实，
则知礼节。”
海王
Kingship Based on the Sea
Style: Dialogue; Duke Huan tells Guan Zhong he wants to impose various new taxes, and Guan Zhong reacts by disagreeing with every idea given. Guan Zhong suggests that Duke Huan run the country by “managing the mountains and seas”, and details how the state can earn revenue through salt and iron prices. This chapter contains a large amount of calculations, which are mostly used to illustrate how a small increase in price of salt will be multiplied across the entire population, resulting in a huge profit.
Economic/Political Content:
Taxing production will harm productivity, and taxing possessions (such as domestic animals) will lead to those possessions being destroyed or hidden. The preferable alternative is collect state revenue through control of salt and iron.
Salt:
Everyone needs to consume a certain amount of salt. By raising the price of salt slightly, the effect would be multiplied across the entire population of the kingdom, none of whom can refuse to consume salt.
This plan reaches more people than a special tax on the leading male of each family, and is also more profitable. This plan would not result in as many complaints as a tax on family size, and the people cannot avoid it as easily as a tax on family size (either by not having kids, or hiding their true family size, depending on translation).
Iron:
Everyone who works does so by using tools made of iron; no one is successful without iron. Therefore, the iron officials should increase the prices of the various iron tools by a certain amount. This increase will affect all of the working populace, who cannot escape paying.
If there should be a state that lacks internal salt and iron production, then the state should import them and adjust the price accordingly for local sales.
Quote:
“Each woman must have a needle and scissors before she can carry on her work. Each person who cultivates the soil must have a digging fork, a plough, and a hoe before he can carry on his work. Each person who builds and maintains hand carts and small and large horse-drawn wagons must have an axe, a saw, an awl, and a chisel before he can carry on his work. Without such tools, no one in the world can be successful.”
“一女必有一鍼一刀，若其事立。耕者必有一耒一耜一銚，若其事立。行服連軺輦者必有一斤一鋸一錐一鑿，若其事立，不爾而成事者，天下無有”
国蓄
The State’s Store of Grain
Style: An essay, or series of essays, depending on how you want to divide the text up. I follow Rickett, who follows the Zhao edition, in separating this chapter into five essays; my Chinese copy does not divide the text at all. Essay one, as divided below, has a strong Legalist overtone.
Economic/Political Content:
Essay I:
Food controls our fate as humans, and money is the medium of exchange. People will die for profit; they become happy when things are given to them, and angry when things are taken away. If people are too rich, they cannot properly be employed, and if they are too poor then they cannot be intimidated by punishment. When profit can be found from sources other than the state, the people won’t be entirely loyal, and they won’t die for the state; if all profit comes from the state, then the government will be worshipped and powerful.
Commodity prices rise and fall in value depending on whether demand is relaxed or pressing. Over time, differences in personal wealth develop between individuals. If the people are hungry despite a full harvest, it is because someone is hoarding grain. If there’s not enough cash in circulation despite the state minting a sufficiency, it is because money has been accumulated as profit; if the state doesn’t break up private hoards of money and ensure equitable distribution of wealth, people will enslave each other.
Given this, skilled governance consists of the following:
(A) Control money and food, so that the people are fundamentally bound to the state, affording the government access to the full strength of the populace.
(B) Grant benefits to the people in a public manner, and then take from them in a discreet manner.
(C) Gather state income through land rents and commercial taxes based on prior calculations, rather than special levies or taxes.
(D) Control price fluctuations so that private traders can’t unjustly profit at everyone’s expense.
(E) Control the distribution of wealth amongst the people, so that the standard of living doesn’t become excessively disparate.
(F) Calculate the amount of grain needed, and ensure that new land is opened to secure that the proper amount is produced.
(G) Break up private hoards of wealth and divide the money so as to ensure that there is cash in circulation and people can get what they need.
The ultimate goal is the creation of Great Government, wherein the people are kept in a political cage. All benefits flow from the state, all necessary resources are controlled by the state. The ruler is viewed as the sun and moon, loved like a father and mother.
Essay II:
When grain is plentiful, it’s cheap; when grain is scarce, it’s expensive. Yet, this is not because production is insufficient. Furthermore, in the absence of opportunity to make profit, prices are unstable.
Trouble can be averted if the government properly obtains and distributes its grain reserves. The state can stabilize grain prices, and gain profit at the same time (presumably using the aforementioned Qing Zhong strategies).
Essay III:
Qing Zhong economics is about stabilizing prices.
A good ruler makes sure that each city has plenty of grain and money in reserve to achieve this. In spring, the cash can be used to employ people ploughing, and in the summer it can be used to employ people weeding. The state can supply the equipment and seeds, so ultimately the private parties that hoard wealth can’t take advantage of the people.
This is done because the good ruler wants to nurture agriculture, and the method chosen allows both the people and the state to benefit.
Essay IV:
Grain determines the value of all other commodities. Sometimes grain is expensive and everything is cheap, and at other times grain is cheap and everything is expensive. When products are spread throughout the country, supply exceeds demand and they become cheap. When products are concentrated, demand exceeds supply and they become expensive.
Therefore, the government intervenes in the market to moderate fluctuation; the ruler should monitor the surpluses and shortages in the kingdom, and manage affairs by buying and selling in accordance with the price shifts. This strategy also relieves the government of the need to impose special taxes. Extracting money by controlling and taking advantage of market prices is more efficient than trying to extract money through other methods, such as a per capita tax.
If one particular country has a different country on each of its four sides, then it will suffer from constant strife and run out of money. Here is how a state should fund itself in such a situation:
(A) Small state: take charge of all loans, and then use fiscal data to institute a system of giving out loans/contracts (presumably this refers to strategies like giving out cash loans for seed, and then demanding to be paid in grain later). Control the price fluctuations using the aforementioned Qing Zhong methods, and take advantage of the fluctuations to profit; at the same time, stabilize prices.
(B) Medium state: institute state monopoly on all natural resources and production, and keep an eye on the harvest.
(C) Large state: monitor the harvest, check to see whether the people are relaxed or working hard, and then take advantage of the situation to make a profit. Maintain overall economic stability by issuing appropriate orders.
Money is not inherently valuable; former rulers simply used money as a means to manage people and maintain order.
Essay V:
By demanding the payment of taxes within a short time-frame, the state can cause a dramatic fall in prices. Former kings would get what they want by creating these fluctuations and taking advantage of them.
Quote:
Essay I:
“If the state has a ten-year store of grain but the people do not have enough to eat, this will force them all to use their talents to obtain a salary from the prince. If the prince acquires money from mountains and seas but the people do not have enough to meet their needs, this will force them all to present the fruits of their labours to the prince on high. Therefore, if the prince maintains a firm hold on food supplies, controls the country’s fiscal needs, and seizes surpluses to limit shortages, then all the people will be bound to him”
“國有十年之蓄，而民不足於食，皆以其技能望君之祿也。君有山海之金，而民不足於用，是皆以其事業交接於君上也。故人君挾其食，守其用，據有餘而制不足，故民無不累於上也”
Essay II:
“When there is a bumper harvest, no one can sell grain in the market, and dogs and pigs eat the food of people. When there is a bad harvest, grain is sold in the market for ten strings of cash per fu, and the roads are filled with starving people.”
“歲適美，則市糶無予，而狗彘食人食。歲適凶，則市糴釜十繈，而道有餓民”
Essay III:
“If prices are stabilised there will be no fluctuation, but if a proper balance is not maintained, high prices will appear.”
Essay IV:
“They made pearls and jade the highest form of money, gold was placed next, and knife and spade copper coins were placed at the bottom. Holding on to these three forms of money will not help one feel warm, nor will attempting to eat them help satisfy one’s hunger. The former kings simply used them to control wealth and goods in order to manage their people’s affairs and pacify the empire.”
“以珠玉為上幣，以黃金為中幣，以刀布為下幣；三幣，握之則非有補於煖也，食之則非有補於飽也，先王以守財物，以御民事，而平天下也”
Essay V:
This is an incredibly short essay, and the limited content has already been stated in previous chapters. However, Rickett provides an interesting quote in the chapter notes; the quote comes from the Book of the Former Han (前汉书):
“Government which acts precipitately is both tyrannical and oppressive; even when per capita taxes and other government levies are not yet due, they are collected. Orders issued in the morning are changed by evening. Whatever the people have on hand they must sell at half price and whoever is without possessions must lay hold of money offered at one hundred percent interest. Consequently there are those who sell their fields and dwellings as well as their children and grandchildren in order to pay their debts.”
山国轨
Using Statistics to Control State Finances
Style:
Another dialogue between Duke Huan and Guan Zhong. This time Duke Huan wants to know about the use of statistics for financial planning, and the avoidance of special taxes and levies. I’ve cut it into four pieces here, following Rickett.
Economic/Political Content:
Dialogue I:
There are many different statistics involved in managing finances; these range from population figures and land quality, all the way to prospective figures about estimated production and need. (Guan Zhong effectively recites a giant list of statistics). These statistics can show you things such as whether a district will lack grain in the future, or have a surplus; use the statistics to recognize opportunities, and keep the statistics secret so that private individuals cannot profit from their use.
After obtaining the necessary statistics, establish the state’s money supply by taking the following steps:
- In regions where the statistics indicate that the harvest will produce more grain than is needed to feed the people, issue public funds as loans. Give large amounts to wealthy families, and small amounts to the poor.
- In regions where the statistics indicate a poorer harvest (mountainous land, unproductive soil, etc), issue public funds to help purchase grain.
- If the harvest turns out well, tell the people in the good farmland regions to pay back their loans in grain. Tell them to discount the market price for grain (presumably already much reduced as the harvest has just come in) when making the payment. This will cause the price of grain to rise, and the value of money to fall.
- The people who live on the less productive land will be okay for the time being, because you issued them public funds. At any rate, the price of grain will soon become very expensive, and the state will control much of it.
- Issue contracts to cover the state’s material needs, and have them state that payment will be in grain. For example, obtain all the silk you need by issuing contracts to the workers. That way the state will be supplied with silk, and the price of grain will revert to normal.
- In accordance with estimates, issue more funds for the purchase of grain to refill the granaries. This will cause another spike in the price of grain.
- Issue a notice to wealthy families and property-holders that the ruler is making a tour of inspection, and they will need to make a cash contribution.
- In the regions that the inspection tour will pass through, issue an order stating that people in possession of grain are not allowed to move it. Announce further that where the region doesn’t have enough grain to sustain the procession, the ruler will lend it to wealthy families to supply the procession. (The price of grain will presumably shoot up in anticipation of supplying this procession.)
- Afterwards, require the wealthy families that were lent grain to repay in cash to the value of the grain. Money will then gain value, and grain will be reduced in value.
On a similar note,
- In every city and outer region, use the Qing Zhong grain hoarding strategy to cause grain to raise in value.
- Release the grain as a loan to be repaid in cash.
- Obtain massive amounts of cash as repayment. Cash will then become highly valued.
- Use the cash to buy up all the goods. Goods will then be highly valued.
- Sell back goods until the market prices stabilise.
Using these strategies means that the government will never have to impose special taxes or levies on the people.
…
Dialogue II:
Brief Introduction to the Qing Zhong method
Qing Zhong is the title given to a series of chapters in the Guan Zi that deal with economic planning and theory. The words “Qing” and “Zhong” literally mean light and heavy, cheap and valuable, unimportant and important, etc.
The Guan Zi is a collection of ancient essays and diagrams that were ultimately collected under one title during the Han Dynasty. Although the content of the text was traditionally attributed to Guan Zhong, hence the name “Guan Zi”, the essays were generally written centuries after Guan Zhong’s death, and come from a wide variety of sources. Nobody knows who wrote the various chapters in the Qing Zhong section, and the different theories on the date of composition range from Warring States, to the reign of the revolutionary classicist, Wang Mang.
If you wish to read the Guan Zi in English, the best edition is Allyn Rickett’s, in two volumes. The complete text consists of 86 chapters (a handful of which have been lost), and in Rickett’s work each chapter comes complete with a lengthy introduction essay and numerous foot notes. All told, you’re looking at about 1,000 pages of English text, of which the Qing Zhong chapters encompass the final 200 pages. For the Chinese text, I have the Hei Long Jiang People’s Press edition in simplified characters. For the most part, the quotes given in this article are from Rickett’s English translation, and the HLJ Chinese text. (NOTE: The quotes were quickly done, and for some of them I just quickly cut and pasted the Chinese from online without making necessary emendations; my focus was almost entirely on producing a chapter summaries)
This site also has the ancient text in traditional characters with support features: http://ctext.org/guanzi . I also think the Library of Chinese Classics edition of the Guan Zi might be out now. The Library produces books that contain English, Ancient Chinese, and Modern Chinese side by side. However, these books are full of typographical errors, so buyer beware.
Now that the short and inadequate introduction is out of the way, let’s review the Qing Zhong chapter-by-chapter!
臣乘马
Planned Fiscal Management
Style: A short dialogue between Duke Huan and his chief minister, Guan Zhong. Duke Huan wants to know how to manage his kingdom; Guan Zhong criticises the duke and then offers an economic idea. The focus is on how the state can obtain the resources it needs to function without imposing new taxes on the people.
Political/Economic content:
Agricultural work must be done during specific parts of the year. Corvee labour takes the people away from their fields. Misuse of corvee labour disrupts agricultural work, and the result is a reduced harvest.
A reduced harvest, combined with taxation, may be too much for the people to bear. Banditry may arise, and civil war could break out. With proper planning, however, the state can obtain whatever it needs without disturbing agricultural work or imposing new taxes. Proper planning consists of the following:
(A) When it is time to sow the crops, spare the people from corvee labour and hand out loans for them to buy seed.
(B) When the new crop is harvested, have the people repay the loans in grain. Store the grain in the state granaries.
(C) When grain becomes expensive, purchase whatever the state desires. Announce that because the state is cash-poor, it will use grain to an equal value to pay the bill.
Grain is plentiful, and therefore cheap, when the new harvest is brought in. By having the loans repaid in grain at this time, the state can fill up the granaries. As time progresses, the amount of grain in the kingdom will shrink, making grain more valuable. The state may then disgorge the granaries, and obtain whatever it needs without imposing new taxes.
Quote:
This chapter lacks good quotes, but here is Guan Zhong’s opening response to Duke Huan:
“If the country lacks reserves, the fault lies with its administrative orders.”
“国无储在令”
乘马数
Art of Fiscal Management
Style: This chapter is a continuance of the former dialogue, and consists of Duke Huan asking Guan Zhong a series of questions. Here, however, the focus is on how the state may stabilise commodity prices and create fairer taxation.
Economic/Political Content:
The state should pay attention to the seasons when issuing orders to the people, so that the harvest is not ruined. The state should regulate commodity prices, so that it can control the flow of goods in international trade, and can put an end to private commodity trading abuses. The state should further control commodity prices so as to regulate private wealth, and compensate for shortfalls in the state budget.
The state should enact the following plans:
(A) The ruler should set aside an amount of grain each year and create a long-term reserve. When a drought or other disaster disrupts agricultural work, the ruler can then employ the masses on state projects and pay them with the stored grain.
This plan is done to maintain economic stability in trying times, rather than please the king with new palaces and toys.
(B) Standardise the price of commodities within the kingdom. Do so by manipulating the price of grain, presumably using the method from the previous chapter.
The economic reasoning is as follows:
If internal prices are cheaper than external prices, then goods will flow abroad. If internal prices are more expensive, then foreign goods will flow into the country. Private experts who have mastered price fluctuations are able to profit, and if the state fails to regulate prices, then someone else will. The fluctuations will impact the people because although they always work the same number of hours, their resulting income will not always have the same purchasing power.
Finally, grain is the key that controls the price of all other commodities. When grain is expensive, everything is cheap. When grain is cheap, everything is expensive.
The purpose of this plan is to put an end to private prospecting, and to ensure that the common people maintain enough purchasing power to support their family.
(C) The state should create a staggered land-tax that takes into consideration the quality of the land. Poor land should be taxed lightly, and the best land can make up the difference. When this is done, people won’t abandon poorer land.
Quote:
Guan Zi illustrating the importance of economic planning:
“…people, lacking even gruel to eat, will be forced to sell their children. Fierce and resolute men will become exceedingly violent, awhile people who are poor and sick become beggars. Should the prince implement laws to restrain them, the people may be punished and executed, but they will not submit to his government on high. Such are the results of failure in the art of planned fiscal management.”
“民无𥼷卖子者数矣。猛毅之人淫暴，贫病之民乞请。君行律度焉，则民被刑僇而不从于主上。此家策乘马之数亡也。”
问乘马
Questions on Fiscal Management
(Lost)
事语
Discourse on Economic Matters
Style: A dialogue between Duke Huan and Guan Zhong. Duke Huan asks Guan Zhong to comment on some economic plans that the duke learnt from two men. The men are named Great Extravagance and Idle Fields, and Guan Zhong criticizes their ideas and offers a third way.
Economic/Political Content:
Great Extravagance: the upper class should purchase lots of fancy products and sacrifice tonnes of animals. This will ensure that production flourishes and plenty of livestock is raised.
Response: This economic plan is only suitable in a large nation not facing danger. The upper class itself is able to consume enough products, and so the state needn’t personally fund the production. If a smaller state tries to do this, the government’s financial reserves may be insufficient to support the production, and if the smaller state competes with larger states then the people will be over-worked.
Idle Fields: don’t bother doing anything; have conquered people do it for us, and have allies save us when need be.
Response: This economic plan is unsuitable, because the imperial holdings will be lost if the internal economy is not stable. Furthermore, states that lack grain reserves will be besieged, and ill-maintained fortifications will fall.
Guan Zi’s plan: Store away a fraction of the grain harvest each year, and create a reserve. The state could even store away half the grain each year, and have people supplement food production by gathering vegetables.
When the state has 10 years worth of grain reserves (a popular goal in literature at the time), everything will be awesome. (to be fair, I think the author assumes that the large grain reserve will be used in accordance with former chapters, thereby stabilizing the economy and maintaining fair wealth distribution).
Quote:
Guan Ζhong drops a rhyme describing how things go under real rulers:
“Their land having been opened for cultivation,
Their people settle down.
Their granaries being full,
Their people know propriety and moderation.”
“壤辟举，
则民留处。
仓廪实，
则知礼节。”
海王
Kingship Based on the Sea
Style: Dialogue; Duke Huan tells Guan Zhong he wants to impose various new taxes, and Guan Zhong reacts by disagreeing with every idea given. Guan Zhong suggests that Duke Huan run the country by “managing the mountains and seas”, and details how the state can earn revenue through salt and iron prices. This chapter contains a large amount of calculations, which are mostly used to illustrate how a small increase in price of salt will be multiplied across the entire population, resulting in a huge profit.
Economic/Political Content:
Taxing production will harm productivity, and taxing possessions (such as domestic animals) will lead to those possessions being destroyed or hidden. The preferable alternative is collect state revenue through control of salt and iron.
Salt:
Everyone needs to consume a certain amount of salt. By raising the price of salt slightly, the effect would be multiplied across the entire population of the kingdom, none of whom can refuse to consume salt.
This plan reaches more people than a special tax on the leading male of each family, and is also more profitable. This plan would not result in as many complaints as a tax on family size, and the people cannot avoid it as easily as a tax on family size (either by not having kids, or hiding their true family size, depending on translation).
Iron:
Everyone who works does so by using tools made of iron; no one is successful without iron. Therefore, the iron officials should increase the prices of the various iron tools by a certain amount. This increase will affect all of the working populace, who cannot escape paying.
If there should be a state that lacks internal salt and iron production, then the state should import them and adjust the price accordingly for local sales.
Quote:
“Each woman must have a needle and scissors before she can carry on her work. Each person who cultivates the soil must have a digging fork, a plough, and a hoe before he can carry on his work. Each person who builds and maintains hand carts and small and large horse-drawn wagons must have an axe, a saw, an awl, and a chisel before he can carry on his work. Without such tools, no one in the world can be successful.”
“一女必有一鍼一刀，若其事立。耕者必有一耒一耜一銚，若其事立。行服連軺輦者必有一斤一鋸一錐一鑿，若其事立，不爾而成事者，天下無有”
国蓄
The State’s Store of Grain
Style: An essay, or series of essays, depending on how you want to divide the text up. I follow Rickett, who follows the Zhao edition, in separating this chapter into five essays; my Chinese copy does not divide the text at all. Essay one, as divided below, has a strong Legalist overtone.
Economic/Political Content:
Essay I:
Food controls our fate as humans, and money is the medium of exchange. People will die for profit; they become happy when things are given to them, and angry when things are taken away. If people are too rich, they cannot properly be employed, and if they are too poor then they cannot be intimidated by punishment. When profit can be found from sources other than the state, the people won’t be entirely loyal, and they won’t die for the state; if all profit comes from the state, then the government will be worshipped and powerful.
Commodity prices rise and fall in value depending on whether demand is relaxed or pressing. Over time, differences in personal wealth develop between individuals. If the people are hungry despite a full harvest, it is because someone is hoarding grain. If there’s not enough cash in circulation despite the state minting a sufficiency, it is because money has been accumulated as profit; if the state doesn’t break up private hoards of money and ensure equitable distribution of wealth, people will enslave each other.
Given this, skilled governance consists of the following:
(A) Control money and food, so that the people are fundamentally bound to the state, affording the government access to the full strength of the populace.
(B) Grant benefits to the people in a public manner, and then take from them in a discreet manner.
(C) Gather state income through land rents and commercial taxes based on prior calculations, rather than special levies or taxes.
(D) Control price fluctuations so that private traders can’t unjustly profit at everyone’s expense.
(E) Control the distribution of wealth amongst the people, so that the standard of living doesn’t become excessively disparate.
(F) Calculate the amount of grain needed, and ensure that new land is opened to secure that the proper amount is produced.
(G) Break up private hoards of wealth and divide the money so as to ensure that there is cash in circulation and people can get what they need.
The ultimate goal is the creation of Great Government, wherein the people are kept in a political cage. All benefits flow from the state, all necessary resources are controlled by the state. The ruler is viewed as the sun and moon, loved like a father and mother.
Essay II:
When grain is plentiful, it’s cheap; when grain is scarce, it’s expensive. Yet, this is not because production is insufficient. Furthermore, in the absence of opportunity to make profit, prices are unstable.
Trouble can be averted if the government properly obtains and distributes its grain reserves. The state can stabilize grain prices, and gain profit at the same time (presumably using the aforementioned Qing Zhong strategies).
Essay III:
Qing Zhong economics is about stabilizing prices.
A good ruler makes sure that each city has plenty of grain and money in reserve to achieve this. In spring, the cash can be used to employ people ploughing, and in the summer it can be used to employ people weeding. The state can supply the equipment and seeds, so ultimately the private parties that hoard wealth can’t take advantage of the people.
This is done because the good ruler wants to nurture agriculture, and the method chosen allows both the people and the state to benefit.
Essay IV:
Grain determines the value of all other commodities. Sometimes grain is expensive and everything is cheap, and at other times grain is cheap and everything is expensive. When products are spread throughout the country, supply exceeds demand and they become cheap. When products are concentrated, demand exceeds supply and they become expensive.
Therefore, the government intervenes in the market to moderate fluctuation; the ruler should monitor the surpluses and shortages in the kingdom, and manage affairs by buying and selling in accordance with the price shifts. This strategy also relieves the government of the need to impose special taxes. Extracting money by controlling and taking advantage of market prices is more efficient than trying to extract money through other methods, such as a per capita tax.
If one particular country has a different country on each of its four sides, then it will suffer from constant strife and run out of money. Here is how a state should fund itself in such a situation:
(A) Small state: take charge of all loans, and then use fiscal data to institute a system of giving out loans/contracts (presumably this refers to strategies like giving out cash loans for seed, and then demanding to be paid in grain later). Control the price fluctuations using the aforementioned Qing Zhong methods, and take advantage of the fluctuations to profit; at the same time, stabilize prices.
(B) Medium state: institute state monopoly on all natural resources and production, and keep an eye on the harvest.
(C) Large state: monitor the harvest, check to see whether the people are relaxed or working hard, and then take advantage of the situation to make a profit. Maintain overall economic stability by issuing appropriate orders.
Money is not inherently valuable; former rulers simply used money as a means to manage people and maintain order.
Essay V:
By demanding the payment of taxes within a short time-frame, the state can cause a dramatic fall in prices. Former kings would get what they want by creating these fluctuations and taking advantage of them.
Quote:
Essay I:
“If the state has a ten-year store of grain but the people do not have enough to eat, this will force them all to use their talents to obtain a salary from the prince. If the prince acquires money from mountains and seas but the people do not have enough to meet their needs, this will force them all to present the fruits of their labours to the prince on high. Therefore, if the prince maintains a firm hold on food supplies, controls the country’s fiscal needs, and seizes surpluses to limit shortages, then all the people will be bound to him”
“國有十年之蓄，而民不足於食，皆以其技能望君之祿也。君有山海之金，而民不足於用，是皆以其事業交接於君上也。故人君挾其食，守其用，據有餘而制不足，故民無不累於上也”
Essay II:
“When there is a bumper harvest, no one can sell grain in the market, and dogs and pigs eat the food of people. When there is a bad harvest, grain is sold in the market for ten strings of cash per fu, and the roads are filled with starving people.”
“歲適美，則市糶無予，而狗彘食人食。歲適凶，則市糴釜十繈，而道有餓民”
Essay III:
“If prices are stabilised there will be no fluctuation, but if a proper balance is not maintained, high prices will appear.”
Essay IV:
“They made pearls and jade the highest form of money, gold was placed next, and knife and spade copper coins were placed at the bottom. Holding on to these three forms of money will not help one feel warm, nor will attempting to eat them help satisfy one’s hunger. The former kings simply used them to control wealth and goods in order to manage their people’s affairs and pacify the empire.”
“以珠玉為上幣，以黃金為中幣，以刀布為下幣；三幣，握之則非有補於煖也，食之則非有補於飽也，先王以守財物，以御民事，而平天下也”
Essay V:
This is an incredibly short essay, and the limited content has already been stated in previous chapters. However, Rickett provides an interesting quote in the chapter notes; the quote comes from the Book of the Former Han (前汉书):
“Government which acts precipitately is both tyrannical and oppressive; even when per capita taxes and other government levies are not yet due, they are collected. Orders issued in the morning are changed by evening. Whatever the people have on hand they must sell at half price and whoever is without possessions must lay hold of money offered at one hundred percent interest. Consequently there are those who sell their fields and dwellings as well as their children and grandchildren in order to pay their debts.”
山国轨
Using Statistics to Control State Finances
Style:
Another dialogue between Duke Huan and Guan Zhong. This time Duke Huan wants to know about the use of statistics for financial planning, and the avoidance of special taxes and levies. I’ve cut it into four pieces here, following Rickett.
Economic/Political Content:
Dialogue I:
There are many different statistics involved in managing finances; these range from population figures and land quality, all the way to prospective figures about estimated production and need. (Guan Zhong effectively recites a giant list of statistics). These statistics can show you things such as whether a district will lack grain in the future, or have a surplus; use the statistics to recognize opportunities, and keep the statistics secret so that private individuals cannot profit from their use.
After obtaining the necessary statistics, establish the state’s money supply by taking the following steps:
- In regions where the statistics indicate that the harvest will produce more grain than is needed to feed the people, issue public funds as loans. Give large amounts to wealthy families, and small amounts to the poor.
- In regions where the statistics indicate a poorer harvest (mountainous land, unproductive soil, etc), issue public funds to help purchase grain.
- If the harvest turns out well, tell the people in the good farmland regions to pay back their loans in grain. Tell them to discount the market price for grain (presumably already much reduced as the harvest has just come in) when making the payment. This will cause the price of grain to rise, and the value of money to fall.
- The people who live on the less productive land will be okay for the time being, because you issued them public funds. At any rate, the price of grain will soon become very expensive, and the state will control much of it.
- Issue contracts to cover the state’s material needs, and have them state that payment will be in grain. For example, obtain all the silk you need by issuing contracts to the workers. That way the state will be supplied with silk, and the price of grain will revert to normal.
- In accordance with estimates, issue more funds for the purchase of grain to refill the granaries. This will cause another spike in the price of grain.
- Issue a notice to wealthy families and property-holders that the ruler is making a tour of inspection, and they will need to make a cash contribution.
- In the regions that the inspection tour will pass through, issue an order stating that people in possession of grain are not allowed to move it. Announce further that where the region doesn’t have enough grain to sustain the procession, the ruler will lend it to wealthy families to supply the procession. (The price of grain will presumably shoot up in anticipation of supplying this procession.)
- Afterwards, require the wealthy families that were lent grain to repay in cash to the value of the grain. Money will then gain value, and grain will be reduced in value.
On a similar note,
- In every city and outer region, use the Qing Zhong grain hoarding strategy to cause grain to raise in value.
- Release the grain as a loan to be repaid in cash.
- Obtain massive amounts of cash as repayment. Cash will then become highly valued.
- Use the cash to buy up all the goods. Goods will then be highly valued.
- Sell back goods until the market prices stabilise.
Using these strategies means that the government will never have to impose special taxes or levies on the people.
…
Dialogue II:
mistersix
mistersix
desire be, desire go
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very interesting stuff, thanks for posting what you've got so far.
crustpunk_trotsky
crustpunk_trotsky
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yeah! yeah!!
shennong
shennong
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The bits about controlling grain prices and state control of seed and equipment are really interesting. I've been looking for remnants of Nongjia texts in Wang Zhen's Nongshu, it didn't occur to me to look at the Guanzi. I wonder whether the ideas about price controls are drawn in part from the Nongjia agricultural texts the Qin kept. Mencius argues against price controls vs a nongjia person in a different (not specifically agricultural) context. The legalists wouldn't have had any problem with it, though, so I wonder if there are some of those influences on that essay. Might be stretching it a bit.
germanjoey
germanjoey
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just finished reading this, REALLY INTERESTING IMHO. (please send more!)
i hadn't really heard of Guan Zhong before (I admit I'm rather ignorant of major Eastern philosophers outside the major religiosos), but it sounds like he has had a really profound influence Lee Kuan Yew, who is, perhaps, at least philosophically, one of most influential people on 21st century political policy... the one who scares the shit out of me the most, frankly. hahahha...
i'm looking forward to learning more here!!
i hadn't really heard of Guan Zhong before (I admit I'm rather ignorant of major Eastern philosophers outside the major religiosos), but it sounds like he has had a really profound influence Lee Kuan Yew, who is, perhaps, at least philosophically, one of most influential people on 21st century political policy... the one who scares the shit out of me the most, frankly. hahahha...
i'm looking forward to learning more here!!
anistorian
anistorian
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grain agitation works best in a dry, clean cycle, but that aintseen't secret can be summarized with an animated depiction of scrubbing bubbles. this subject touches on the foundation of 17th century bavarian goldsmith lore, and leads me to wonder if there are occultist roots hidden beneath the framework. or is it really just coded into the framework of feng shui and kung fu tzu? they really lend themselves nicely to market similes, which are all too commonly narrated using butchered physics terminology funneled through hamfisted blowhards, gesturing attempts to demystify the abstract algorithmic fluctuation of markets in a series of refined grunting.
as elements and archetypes are based in concepts of trees contained within mandalas,there is commonallity between eastern schools and western occlusion. the plank in the eye of the nude monarch may appear less elongated; more obtuse. but seriously: maize.
as elements and archetypes are based in concepts of trees contained within mandalas,there is commonallity between eastern schools and western occlusion. the plank in the eye of the nude monarch may appear less elongated; more obtuse. but seriously: maize.
Lykourgos
Lykourgos
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Flying back in 12 hours or so, then I can finish the last half of this. Then I'll post it and an essay must be written declaring that Guan Zi Qing Zhong economics must be applied in the modern world.
My English edition of Guan Zi actually quotes a 20th letter that states that a southern warlord was re-organising society along the lines of a chapter in the guanzi
My English edition of Guan Zi actually quotes a 20th letter that states that a southern warlord was re-organising society along the lines of a chapter in the guanzi
shennong
shennong
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lykourgos, tear down this finish this thread
Lykourgos
Lykourgos
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I will at least start the second half this week; was planning to start tonight but the missus made me watch a really terrible 80s movie with that famous actor where he gets a job in a mail room of some big firm because his uncle is the president, and then when someone gets fired he moves into the empty executive office and somehow convinces everyone that he's a newly hired executive, then he has sex with everyone and buys out the firm thanks to his work ethic and risk taking genius